Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Deutsche Bank / Craigs New Zealand Corporate Day 2015
26 slides from Fisher & Paykel Healthcare's conference presentation, March 2015
Slide 1: Fisher & Paykel Healthcare
Fisher & Paykel Healthcare Deutsche Bank / Craigs New Zealand Corporate Day Sydney – March 2015 1
Slide 2: Investment Highlights
Investment Highlights • A leader in respiratory and OSA treatment devices • Consistent growth strategy • Estimated US$5.0+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Markets & Products
Markets & Products • Respiratory & Acute Care (RAC) - Heated humidification - Respiratory care - Neonatal care - Surgery • Obstructive Sleep Apnea (OSA) - Masks - Flow generators - Data management tools - Humidifiers • Recurring items, consumables and accessories approximately 80% of core Revenue by
Slide 4: Hospital Cost Breakdown
Hospital Cost Breakdown Medical devices Other – includes labour, utilities, drugs, supplies, food, depreciation Source: Estimates of Medical Device Spending in the United States, Donahoe, G and King, G, June 2014 4
Slide 5: Lower Care Intensity Equals Lower Cost
Lower Care Intensity Equals Lower Cost Mean Annual COPD-Related Medical, $50,000 Pharmacy, and Total Costs by Care Intensity Cohort $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient ED cohort Standard admission ICU cohort cohort cohort Source: Anand A Dalal,
Slide 6: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or oxygen therapy • Mucociliary transport system operates less effectively • Need to deliver gas at physiologically normal levels - 37 oC body core temperature - 44mg/L 100% saturated 6
Slide 7: Therapies - Respiratory Care, Acute Care & Surgery
Therapies - Respiratory Care, Acute Care & Surgery Invasive ventilation Noninvasive ventilation Oxygen therapy Humidity therapy Neonatal invasive Neonatal Neonatal Surgical ventilation noninvasive ventilation oxygen therapy humidification 7
Slide 8: Respiratory, Acute Care & Surgery - Hardware
Respiratory, Acute Care & Surgery - Hardware • 850 respiratory humidifier system - Invasive ventilation, oxygen therapy and non-invasive ventilation • 810 respiratory humidifier system - Entry level system - Ventilation and oxygen therapy - Optional heated breathing circuit • AIRVO 2 flow generator/
Slide 9: Respiratory & Acute Care - Single Use Consumables
Respiratory & Acute Care - Single Use Consumables • Single-use chambers - Patented auto filling MR290 • Single-use breathing circuits - Patented spiral heater wire - Proprietary Evaqua 2 expiratory tube - Minimal condensation - Delivery of optimal humidity • Breathing circuit components - Filters, c
Slide 10: Optiflow Therapy – Delivery Options
OptiflowTM Therapy – Delivery Options 10
Slide 11: Obstructive Sleep Apnea
Obstructive Sleep Apnea • Temporary closure of airway during sleep • Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack • Estimated US$2.5+ billion worldwide market, growing approximately 6 - 8% • Potentially 50-60 million affected wor
Slide 12: Revolutionary Masks
Revolutionary Masks • Comfortable • Easy to fit • Efficient 12
Slide 13: Stylish, Smart + Simplified CPAP Range
Stylish, Smart + Simplified CPAP Range • Efficiently integrates with InfoUSB and InfoSmart Web • Responsive pressure relief - SensAwake • ThermoSmart humidifier breathing tube technology • Auto-adjusting CPAP 13
Slide 14: Efficient Compliance Reporting
Efficient Compliance Reporting 14
Slide 15: Research & Development
Research & Development • 9.9% of operating revenue, NZ$31.3M1 • Product pipeline includes: - Humidifier controllers - Masks - Respiratory consumables - Flow generators - Compliance monitoring solutions • 115 US patents, 273 US pending, 486 ROW, 322 ROW pending 1 at 30 September 2014 15
Slide 16: Manufacturing & Operations
Manufacturing & Operations • Vertically integrated - COGs improvements; Mexico, Lean manufacturing, supply chain • Ample capacity to grow Auckland, New Zealand - Three buildings: 82,000 m² / 885,000 ft² total - 100 acres/40ha land Tijuana, Mexico - 18,000 m2 / 200,000 ft2 - Manufacturing floor area
Slide 17: Global Presence
Global Presence • Direct/offices - Hospitals, home care dealers - Sales/support offices in North America, Europe, Asia, South America, Middle East North and Australasia, 15 distribution centres America Europe - More than 600 staff in 30 countries 42% 33% - Ongoing international expansion • Distribut
Slide 18: First Half Result Highlights
First Half Result Highlights H1 FY15 (6 months to 30 September 2014) PCP CC1 Operating profit +8% +64% RAC & OSA operating revenue +6% +14% Gross margin (bps increase) +212- +457- RAC new applications consumables +23% +26% revenue OSA mask revenue +15% +20% Recurring items, consumables and accesso
Slide 19: Innovative Products Driving Growth
Innovative Products Driving Growth • Respiratory & acute care (RAC) - Optiflow™ respiratory therapy system - Evaqua™2 breathing circuits - AIRVO™2 & myAIRVO™2 humidifiers with integrated flow generators • Obstructive sleep apnea (OSA) - Simplus™ full face mask - Eson™ nasal mask - ICON™+ flow genera
Slide 20: H1 FY2015 Operating Results
H1 FY2015 Operating Results H1 FY15 (6 months to 30 September 2014) %Revenue NZ$M PCP CC1 Operating revenue 100% 317.4 +4% +12% Cost of sales 39.4% 125.2 -1% +2% Gross profit 60.6% 192.2 +8% +22% Other income (R&D grant) 2.5 SG&A 28.6% 90.8 +5% +9% R&D 9.9% 31.3 +21% +21% Total operating expenses
Slide 21: Dividend
Dividend • Increased interim dividend by 7%: – Gross 8.06 NZ cps = 5.8 cps + 2.26 cps imputation credit, NZ residents – Fully imputed – 1.02 cps non-resident supplementary dividend – Dividend reinvestment plan available for NZ/AU residents, discount has been removed 21
Slide 22: Respiratory & Acute Care (RAC)
Respiratory & Acute Care (RAC) H1 FY2015 • Operating revenue growth - NZ$ +6% - Constant currency +13% • New applications consumables revenue growth (Noninvasive ventilation (NIV), Optiflow, AIRVO, Surgical) - NZ$ +17% - Constant currency +26% • New applications consumables 45% of RAC consumables re
Slide 23: Obstructive Sleep Apnea (OSA)
Obstructive Sleep Apnea (OSA) H1 FY2015 • Operating revenue growth - NZ$ +5% - Constant currency +15% • Mask revenue growth - Constant currency +20% • Total flow generator revenue growth ‾ Constant currency +8% • Masks continue to take market share 23
Slide 24: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow H1 FY15 (as at 30 September 2014) NZ$M Operating cash flow 58.6 Capital expenditure 25.5 Depreciation and amortisation 15.7 Net debt 91.6 Total shareholders equity 414.3 Total assets 625.8 • Pre-tax return on equity (annualised) 33% • Pre-tax return on total assets (annuali
Slide 25: Foreign Exchange Hedging
Foreign Exchange Hedging • NZ$520m of hedging in place at 3 March 2015. • Hedging position for our main exposures: Balance FY15 FY16 FY17 FY18 USD % cover of expected exposure 97% 75% 35% 1% USD average rate of cover 0.78 0.75 0.73 0.66 EUR % cover of expected exposure 98% 78% 35% 0% EUR average rat
Slide 26: Consistent growth strategy
Consistent growth strategy • Experts in humidification, respiratory care, and obstructive sleep apnea • Provide innovative devices which can improve patient care and outcomes Continuous product improvement More devices for each patient Serve more patient groups – invasive ventilation, NIV, oxygen th
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